Mumbai: The Anil Ambani-controlled Reliance Natural Resources Ltd (RNRL) on Tuesday said it is willing to produce before the Bombay high court parts of the family memorandum of understanding (MoU) that formed the basis of the demerger of the Reliance group in 2005.
RNRL is fighting a case against Mukesh Ambani’s Reliance Industries Ltd (RIL) over rights to gas from the latter’s find in Krishna-Godavari (KG) basin, and its case significantly depends on terms of the document that hasn’t been seen by too many people.
A two-member bench of the Bombay high court, comprising justices J.N. Patel and K.K. Tated, on Tuesday asked if portions of the MoU relevant to the gas sharing agreement could be produced as RNRL was building its case around the document. The court did not order for it to be produced immediately. “We will ask for it during the course of the arguments” if it is found necessary, justice Patel said.
RIL’s advocate Milind Sathe objected, saying the MoU was not binding on the firm and that RNRL should file a separate application if it wanted to produce additional evidence.
The two firms are embroiled in a lawsuit over RNRL’s entitlement to 28 million standard cubic metres per day (mscmd) of KG basin gas for 17 years at $2.34 (Rs103.66 today) per million British thermal unit from RIL.
The case has been adjourned till 30 September.
RNRL’s lawyer Ram Jethmalani, assuring the court that the firm was willing to “produce the MoU if the court found it beneficial for the course of justice”, said RIL was reneging on its promise of supplying gas at older, lower prices following a spurt in international prices. Mukul Rohatgi, also representing RNRL, said RIL was exaggerating its capital expenditure in the project. “How can the investment go from Rs20,000 crore to Rs45,000 crore for producing the same quantity of gas?” asked Rohatgi.
RIL has estimated a peak production of 80mscmd gas at an investment of at least Rs40,000 crore in the KG basin that could be worth $50 billion.
An oil and gas analyst has said in a note that the lawsuit is acting as a drag on RIL’s production and revenues. In the note, dated 26 August, Kotak Securities Ltd’s oil sector analyst Sanjeev Prasad wrote that there was a “continued stalemate on (RIL’s) gas” litigation even when gas production was not far away. Terming the impact of the continuing legal dispute as “neutral at best to hugely negative”, Prasad said “a delay in the resolution of the ongoing legal dispute may potentially delay gas production from RIL’s KG D-6 gas block”.
Government counsel T.S. Doabia, who created a furore in a recent hearing by saying RIL and NTPC Ltd did not have a “concluded” agreement, did not have an opportunity to either retract his earlier statement, or stand by it.
NTPC and RIL are fighting a separate case on the supply of gas from the latter’s KG basin find. The case has a bearing on the one between RIL and RNRL because the latter claims that RIL has agreed to supply it gas at the same price at which it supplies NTPC.
On Monday, Jethmalani told reporters that Mukesh Ambani did not seem willing to talk and had not responded to Anil Ambani’s offer to meet him. In a previous hearing, RNRL had extended an olive branch, with its lawyers saying Anil Ambani was willing to meet his brother “anytime, anywhere” to thrash out a settlement.
“We will respond to it when our turn comes,” Sathe told Mint when asked if RIL was going to accept this offer.